The home office deduction cannot increase your passive losses:You can only deduct home office expenses up to your net rental incomeIf your rentals are already showing a loss, the home office deduction won't helpExcess deductions carry forward to future yearsMust apply §280A limitations first, then passive loss rulesExample: 🔢Rental Income: $24,000Regular Rental Expenses: -$20,000Net Before Home Office: $4,000Home Office Expenses: $3,000 [using allocations, not the Simplified Method]Result: Can deduct full home officeCounter Example: 🔢Rental Income: $24,000Regular Rental Expenses: -$26,000Net Before Home Office: -$2,000 (Loss)Home Office Expenses: $3,000Result: No home office deduction this year (carries forward)Reality Check: 🤔Let's be honest - while technically you need to:Calculate net rental incomeApply §280A limitations [Consult your CPA on this!]

When a tenant moves out, transfer the deposit back to Checking so it's ready to apply towards expenses or refund the Tenant.If you end up with excess funds in the Checking account, I recommend you transfer it to a third account designated explicitly for future investments.

Your rate will be higher than current, but give you your cash out to use for future opportunities. 

We still have a long way to go before we reach our occupancy goals but are excited at the future possibilities. 

Ask your PM how to come up with some strategic incentives...possibly listing high and reducing every 7-10 days until it's rented, offer a move in special, a gift card, future rent credit, etc. 4.

Keep reading, keep learning and real estate will be very rewarding in the future.

Since you’re still figuring out where to invest, look for areas with strong rental demand, good schools, low crime, and potential for future growth.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

Remember, investing 200,000 into an ADU won't likely increase your properties value by 200,000, but the rent potential is a great bonus.

Focus on undervalued properties, prioritize high-ROI renovations, and refinance to pull equity for future deals while maintaining 20-25% equity.